OPTiM : Corporate Governance Report

[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT

OPTiM Corporation

Last Update: June 30, 2020

OPTiM Corporation

President: Shunji Sugaya

Inquiries: Corporate Management Division [phone] (Securities code: 3694) https://www.optim.com/

The corporate governance of OPTiM Corporation (the "Company") is described below.

Ⅰ ．Basic Views on Corporate Governance, Capital Structure, Corporate Profile and

Other Basic Information

1. Basic Views

OPTiM believes that transparency and soundness of the Company's operations are of the highest priority in growing the corporate value.

The Company strives to enrich its corporate governance according to the following basic policies.

1. The Company respects its shareholders rights and secures their equality.
2. The Company keeps aware of shareholders' histories and cooperates with them.
3. The Company discloses the corporate information timely and appropriately and aims to ensure transparency.

[Reasons for Non-compliance with the Principles of the Corporate Governance Code]

[Principle 3-1] Enhancement of information disclosures

1. The Company's business field of AI, IoT, and robotics changes quickly due to technological advances, the creation of new markets, and the enactment of new laws governing such technologies. As a result, prompt and flexible judgement is required. Therefore, the medium-term business plan is analyzed and confirmed as needed and reviewed when necessary. As a result, the Company believes that the medium-term business plan does not provide shareholders with an appropriate understanding of the business strategy and financial situation, and so it is not published.

[Supplementary Principle 4-2-1]

The Company is making a comprehensive examination of plans for incentives as remuneration coupling with structure and proportion of whole remuneration and with medium- to long-term business results.

[Principle 4-8] Effective Use of Independent Outside Board Directors

The Company has already appointed one outside board director, who, from an independent standpoint, has fulfilled the advisory and supervisory functions. Considering factors such as the size of the Company and the number of employees, the Company does not believe that it is currently necessary to appoint multiple outside board directors. Whether or not it is advantageous to appoint more than one outside board director is to be considered considering factors including the roles and responsibilities of the board of directors, the outside board director's experience and content of their guidance and supervision, the growth and number of employees of the Company, and the business conditions and scope of the Company. The Company will continue to consider the issue, while taking into account factors including the risks to internal control.

[Disclosure Based on the Principles of the Corporate Governance Code] [updated]

[Principle 1-4]Cross-Shareholdings

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT

OPTiM Corporation

In principle, the Company does not hold any cross shares. Company shall proceed with having cross-held shares when it is judged to be conductive to improvement of the Company's corporate value under comprehensive consideration on strengthening business relationship, merits on business and strategy, related investment amount and other demerits.

The Company deliberates on having cross-held shares every year in the board of directors for their medium- to long- term economic rationality and future outlook and confirms the purpose of holding them and the rationality. The Company exercises the voting rights of cross-held shares on a proposed bill appropriately with careful examination of the content and judgment of contribution to improvement of shareholders' value.

[Principle 1-7] Related Party Transactions

The Company requests an advance approval by the board of directors according to laws and ordinances when making a deal with any of the Company's board directors.

The Company makes a deal with the its affiliated company or its major shareholder under a proper condition considering market quotations and gives an approval at an organization such as the board of directors and the chairman of the board according to the content and amount of the deal.

[Principle 2-6] Acting as a Corporate Pension Asset Owner

The Company has not introduced the fund-type/contract-type defined benefit pension and welfare pension fund as envisioned by the Code.

[Principle 3-1] Full Disclosure

(i) Management policy, management strategy and management plan

For the Company's management policy and management plan, please refer to the company website and publicized materials of corporate explanatory meeting.

1. Basic Policies on Corporate Governance Please refer to the company website.
2. Policy and Procedure of Decision on Remuneration of Corporate Management and Board Directors by the Board of Directors

The Company determines a limit on the remuneration of board directors in a resolution of a general shareholders' meeting. Remuneration of each board director is determined by comprehensive evaluation of the Company's business results and the individual's contribution etc. in a resolution of the board of directors. In addition, when considering remuneration for inventions by staff created during work duties, in accordance to intellectual property rights management rules, the result will be based on the conclusion of an investigation by invention investigative commission and a resolution conducted at a board of directors meeting. As a future plan, the Company will investigate as necessary such remuneration using the company stock linked with medium- to long-term profits of the shareholders.

1. Policy and Procedure of Appointment of Corporate Management, Board Directors and Audit & Supervisory Board Members by the Board of Directors Meeting

The Company makes a list of candidates for its board directors widely from both inside and outside the company and decides the final candidates at the board of directors considering viewpoints including performance record, insight, possession of superior management capability and ethical view. Regarding policy and procedure for dismission board directors and corporate auditors, it is deemed that if the functions of the role are not fully exerted, the board of directors will explain the reasons for dismissal, make a decision, and submitted to the general meeting of shareholders.

1. When the Company considers candidates for board directors, the candidates are proposed at the General Meeting of Shareholders held at the time of election, and the reasons for their election are disclosed in the reference document "Notice of Convocation of General Meeting of Shareholders." The selection reasons for candidates for outside board directors and outside corporate auditors are disclosed in "1. Organizational Composition and Operation" of the section "II Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management" of this Corporate Governance Report.

[Supplementary Principle 4-1-1]

The board of directors makes decisions on matters that are stipulated in laws and articles of incorporation, that are related to basic policy of management and that are important for management such as medium- to long-term management plan, as prescribed in the rule and decision making authority list of the board of directors under the policy of separation of execution and supervision.

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT

OPTiM Corporation

The executive team is running the business in accordance with the basic policy of management and management plan decided by the board of directors.

[Principle 4-8] Effective Use of Independent Outside Board Directors

The Company has appointed three outside audit & supervisory board members as independent board directors in addition to one outside board director, and, when taking the company size into account, does not consider it necessary to appoint more than one-third of the board directors as independent outside board directors .

[Principle 4-9] Independence Standards and Qualification for Independent Outside Board Directors

The Company selects independent outside board directors according to its standard based on the independence criteria defined by Tokyo Stock Exchange, Inc.

[Supplementary Principle 4-11-1]

The board of directors determines selection of candidates for board directors after sufficient discussions considering the company size and medium- to long-term strategy in addition to the balance and diversity of knowledge, experience, and capability of whole board of directors.

[Supplementary Principle 4-11-2]

The Company discloses the status of holding board director posts of other listed companies concurrently by board directors and audit & supervisory board members in reference material of general shareholders' meeting notice, corporate business report etc.

[Supplementary Principle 4-11-3]

Evaluation of effectiveness of the board of directors

Evaluation Method

The Company distributes a questionnaire to board directors in advance, using both closed answer and free answer questions. The results are then discussed in the board of directors.

The items of the questionnaire are as follows: (1) the number of times board meetings are held, and (2) the method and time of presenting the agenda in the meetings, (3) the composition of the board of directors, (4) the system of the board of directors, such as the pros and cons of transition to a company with committees. All board directors answer the questionnaire completely.

Summary of Opinions

The result of the questionnaire is that there are no particular issues. The summary of results are as follows.

Regarding the number of board meetings, there are many opinions that the current situation is acceptable as that it provides swift and sufficient deliberation. The length of the meetings is about one hour, and is considered sufficient.

In regard to presenting resolutions, there is an opinion that it would be more efficient for deliberations to occur over the course of three days, but there are also opinions that they should happen over a week, which is said to be more suitable for substantial examination. It was agreed that this issue shall be continuously improved upon. There is also an opinion that the functions of the general affairs division should be restructured to present resolutions at an early stage.

Regarding the attendance of staff to the board of directors, including executive officers, there is opinion that it is not necessary at this time. There are opinions that this number could be halved, but at present, there are no issues. The Company emphasizes that the discussions and speedy decision-making by the board is important, and it is declared that staff will not attend the meetings.

About the institutional design of the board directors, there are positive opinions about the current status, however, there is also opinion that there is room for consideration based on future social situations.

The majority of opinion states that the current number of directors is necessary and sufficient, but some have called for the appointment of a board director to specifically oversee engineering.

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT

OPTiM Corporation

Regarding the number of outside board directors, the majority opinion states that they are currently fulfilling their roles appropriately for the circumstances, such as the size of the Company.

In order to improve its effectiveness, the board will continue to consider the opinions expressed by its members.

[Supplementary Principle 4-14-2]

The Corporate Management Division holds necessary training sessions for board directors based on their demand. In addition, the Company gives explanation to newly-appointed board directors in advance about matters regarding corporate profile, corporate philosophy, management condition and corporate governance, various rules and matters regarding compliance including insider trading.

[Principle 5.1] Policy for Constructive Dialog with Shareholders

1. Designation of an executive or a board director who unifies whole dialog with shareholders and oversees realization of constructive dialog
   The Company continually conducts dialog with shareholders and investors for sustainable growth and medium- to long-term increase of the corporate value. The Company strives to make timely and proper information disclosures of its IR activity under the board director of administration as an information handling officer.
2. Procedure for organic cooperation among departments of IR staff, corporate management & planning, general affairs, financial affairs, accounting, judicial affairs etc. to assist dialog.
   The Company appoints the board director of administration as an IR handling officer as the basis of dialog with shareholders. More specifically, the board director of administration, who obtains information through collective approvals and directors' meeting etc., defines a framework of IR activities, and IR staff carefully examine the content including coordination with a business connection cooperating with related departments. PR staff check the IR content before disclosure from viewpoints of appropriateness of the content and expressions etc.
3. Efforts to enrich measures other than individual meetings (e.g. investors meeting and IR activities)

The Company strives to enrich information on the website focusing on timely disclosure system as described in (ii) above as the measure for dialog with shareholders. Specifically, the Company informs detailed data that cannot be followed by timely disclosures and provides introduction of products and explanation of features etc. Also the Company strives to provide information in English for foreign investors on the company website. The Company is striving to enrich other measures of dialog with investors by holding explanatory meetings twice a year and disclosing the progress of product announcement meeting etc.

1. Procedure for proper and efficient feedback of shareholders' opinions and concerns obtained by dialog to corporate management and the board of directors
   The Company strives to reflect opinions from shareholders to the corporate management for medium- to long-term increase of the corporate value by sharing them among management staff via dedicated mailing list and also by a report to the directors' meeting regarding important opinions.
2. Procedures for management of insider information in dialog

The Company controls insider information strictly in accordance with the rules for internal information control. Specifically, the Company limits usage of the information to a necessary minimum number of staff and performs appropriate handling under management of the administration department.

Also, the Company prepares a system to prevent leakage of insider information by means of internal training about insider deals for all employees and separate ones for board directors.

2. Capital Structure

		Foreign Shareholding Ratio		Less than 10%
[Status of Major Shareholders] [updated]
		Name / Company Name		Number of	Percentage (%)
					Shares Owned
	Shunji Sugaya		17,592,400	63.94
	Japan Trustee Services Bank, Ltd. (trust account)		1,635,400	5.94
	NIPPON TELEGRAPH CORPORATION AND TELEPHONE EAST	1,600,000	5.82

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT					OPTiM Corporation
	The Master Trust Bank of Japan, Ltd. (trust account)			549,400		2.00
	Japan Trustee Services Bank, Ltd. (trust account 9)			432,100		1.57
	The Dai-ichi Life Insurance Company, Limited (standing proxy of		405,800		1.47
	Trust & Custody Services Bank, Ltd.)
	Shouzou Ogami			319,200		1.16
	Fuji Xerox Co., Ltd.			294,640		1.07
	BBH/SUMITOMO MITSUI TRUST (UK) LIMITED FOR SMT		224,500		0.82
	TRUSTEES (IRELAND) LIMITED FOR JAPAN SMALL CAP
	FUND CLT AC (Standing proxy for Sumitomo Mitsui Banking
	Corporation)
	JP MORGAN CHASE BANK 385151 (Standing proxy for Mizuho		182,945		0.66
	Bank, Ltd., Settlement & Clearing Services Department)
	Controlling Shareholder (except for Parent Company)	Shunji Sugaya
	Parent Company	No
Supplementary Explanation
	None to report.
3. Corporate Attributes
	Listed Stock Market and Market Section	Tokyo Stock Exchange	First Section
	Fiscal Year-End	March
	Type of Business	Information & Telecommunication
	Number of Employees (consolidated) as of the End of	From 100 to less than 500
	the Previous Fiscal Year
	Sales (consolidated) as of the End of the Previous	Less than ¥10 billion
	Fiscal Year
	Number of Consolidated Subsidiaries as of the End of	Less than 10
	the Previous Fiscal Year

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder

Transactions between the controlling shareholder and the Company are held to the same policies of other, common transactions. The contents and validity of transactions are discussed by the board of directors, and the transaction is definitively decided upon.

5. Other Special Circumstances which may have Material Impact on Corporate Governance

None to report.

Ⅱ．Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management

1. Organizational Composition and Operation

	Organization Form		Company with Audit & Supervisory Board

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT

OPTiM Corporation

[Directors]

Maximum Number of Board Directors Stipulated in

7

Articles of Incorporation

Term of Office Stipulated in Articles of

2 years

Incorporation

President

Chairperson of the Board

5

Number of Board Directors

Yes

Appointment of Outside Board Directors

Number of Outside Board Directors

1

Number of Independent Outside Directors

1

Relationship with the Company (1)

Name

Attribute

Relationship with the Company(※)

a

b

c

d

e

f

g

h

i

j

k

Rikihei Egawa

From an outside company

△

※Categories for "Relationship with the Company"

※"○" when the director presently falls or has recently fallen under the category; "△" when the director fell under the category in the past

※"●" when a close relative of the director presently falls or has recently fallen under the category; "▲"when a close relative of the director fell under the category in the past.

1. Executive of the Company or its subsidiaries
2. Non-executivedirector or executive of a parent company of the Company
3. Executive of a fellow subsidiary company of the Company
4. A party whose major client or supplier is the Company or an executive thereof
5. Major client or supplier of the Company or an executive thereof
6. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property from the Company besides compensation as a director/audit & supervisory board member
7. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
8. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f) (the director himself/herself only)
9. Executive of a company, between which and the Company outside board directors/audit & supervisory board members are mutually appointed (the director himself/herself only)
10. Executive of a company or organization that receives a donation from the Company (the director himself/herself only)
11. Others

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT

OPTiM Corporation

Relationship with the Company (2)

Name

Designation

Supplementary Explanation of the

Reasons of Appointment

as

Relationship

Independent

Board

Director

Rikihei Egawa

Yes

With the goals of introducing

Although this person has

customers and providing

not conducted company

management guidance and advice,

administration as official

this person initially entered a

staff, because of his

contract for an advisory position.

abundant sales experience

This person's initial contract,

is of great use to the

however, was terminated at the

Company, his influence on

same time when a new contract as

this company with talents

an outside board director for the

such as skilled risk

Company was concluded.

management, and his

In addition, although this person

ability to appropriately

was working for NTT Electronics,

accomplish and make

which has business relationship

judgments, he has been

with OPTiM under "Optimal

elected as an outside board

service sales agent contract" until

director. In addition,

March 2011, it is judged,

without any special interest

considering its transaction scale

in this company, and

and characteristics, to have no

conducting judgment

influence on judgment of

without any concern in

stockholders and investors.

affecting profits as a

general shareholder, this

person was hired as an

independent board director.

Voluntary Establishment of Committee(s)

No

Corresponding to Nomination Committee or

Remuneration Committee

[Audit & Supervisory Board]

Establishment of Audit & Supervisory Board

Yes

Maximum Number of Audit & Supervisory Board

4

Members Stipulated in Articles of Incorporation

Number of Audit & Supervisory Board Members

3

Cooperation among Audit & Supervisory Board Members, Accounting Auditors and Internal Audit Departments

The audit & supervisory board members and internal audit leader, based on auditing plans, once every half-year, hold a meeting to discuss practical auditing research and results of such research relating to auditing policies, plans, processes and procedures. In addition, information exchange and cooperation related to business duties and auditing enforcement are promoted during each audit as necessary.

Audit & supervisory board members and accounting auditors, based on auditing plans, hold an opinion exchange meeting at least once every half-year. Coordination between the various financial statements and auditing reports are done at each financial report time, and at any time, if an item needing confirmation should arise, the audit & supervisory board member can raise an inquiry.

The internal auditing team and accounting auditor, before and after enforcing an internal audit, exchange information of the procedure or results of an audit, and discuss further checking items to be worked on. In addition, in regard to things like sales and purchases that are important parts of business flows, the internal audit leader can call for a discussion with auditors for a quick action.

	Appointment of Audit & Supervisory Board Member	Yes
	Number of Outside Audit & Supervisory Board	3
	Members
	3
	Number of Independent Audit & Supervisory Board
	Members

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT

OPTiM Corporation

Relationship with the Company (1)

Name

Attribute

Relationship with the Company(※)

a

b

c

d

e

f

g

h

i

j

k

l

m

Yoshinori Isagai

Professor

▲

Katsuo Yoshidomi

From an outside company

Kojima Takayuki

Professor

△

※Categories for "Relationship with the Company"

※"○" when the director presently falls or has recently fallen under the category; "△" when the director fell under the category in the past

※"●" when a close relative of the director presently falls or has recently fallen under the category; "▲"when a close relative of the director fell under the category in the past

1. Executive of the Company or its subsidiaries
2. Non-executivedirector or accounting advisor of the Company or its subsidiaries
3. Non-executivedirector or executive of a parent company of the Company
4. Audit & supervisory board member of a parent company of the Company
5. Executive of a fellow subsidiary company of the Company
6. A party whose major client or supplier is the Company or an executive thereof
7. Major client or supplier of the Company or an executive thereof
8. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property from the Company besides compensation as an audit & supervisory board member
9. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
10. Executive of a client or supplier company of the Company (which does not correspond to any of f, g, or h) (the audit & supervisory board member himself/herself only)
11. Executive of a company, between which and the Company outside board directors/audit & supervisory board members are mutually appointed (the audit & supervisory board member himself/herself only)
12. Executive of a company or organization that receives a donation from the Company (the audit & supervisory board member himself/herself only)
13. Others

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT

OPTiM Corporation

Outside Audit & Supervisory Board Member's Relationship with the Company (2)

	Name		Designation		Supplementary Explanation
			as		of the Relationship
			Independent			Reasons of Appointment
			Board
			Director
Yoshinori Isagai		Yes		With the goal of introducing	This person was elected as an
					customers, this person's	outside audit & supervisory
					brother had been hired until	board member with the idea of
					March 2015 in an advisory	strengthening the Company's
					role, and from June 2015 to	auditing system with the high
					February 2016, as a	level knowledge of a professor.
					contracted employee of the	Furthermore, this person's brother
					Company, has engaged in	without being chosen to be an
					work relating to sales.	executive or supervisor of the
						Company, does not conduct
						judgment as an important
						manager of corporate affairs.
						Therefore, without any special
						interest in the Company, and
						conducting judgment without any
						concern in affecting profits as a
						general shareholder this person
						was hired as an independent
						board director.
Katsuo Yoshidomi		Yes	---	This has been appointed as an
						outside audit & a supervisory
						board member due to their
						knowledge from their experience
						as a board director in charge of
						the administration department for
						many years at Hashiguchi Electric
						Inc.., a shareholder of the
						Company, and is deemed suitable
						for strengthening the audit system
						of the Company. In addition, the
						Company has determined that
						there is no special interest in the
						Company nor risk of conflict, and
						has appointed this person as an
						independent officer.
Takayuki Kojima		Yes		The Company has signed an	This person has been working for
					advisory contract with this	more than seven years as a
					person for the purpose of	member of the board directors
					advice, guidance, and	and as a director in various
					cooperation for the	capacities, including Saga
					integration of agriculture and	University council member and
					IT, but contract ended when	board member, and Nishikyushu
					this person as appointed as	University board of directors
					an outside corporate auditor	member. This person has a wide
					of the Company.	range of knowledge and
						experience in educational
						corporate management. Based on
						this, he was appointed as an
						outside corporate auditor. In
						addition, it is believed that this
						person is suitable for
						strengthening the auditing system
						of the company and can
						appropriately perform their
						duties, in addition to having no

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT			OPTiM Corporation
						special interest or conflict of
						interest with the company; and
						such has been designated as an
						independent officer.
[Matters Related to Independent Directors]
		Number of Independent Board Directors		4

Matters relating to Independent Board Directors/Audit & Supervisory Board Members

All outside board directors who fit the requirements of independent board directors are designated as independent board directors.

[Matters Related to Incentives]

Implementation of policies for board directorIntroduction of stock option plan incentives

Supplementary Explanation

This has been introduced to increase the motivation and morale of the Company's board directors.

Recipients of Stock Options	Inside Board Directors, Inside Audit & Supervisory Board
	Members, Employees
Supplementary Explanation

Stock options have been introduced with the goal to increase the morale and motivation of the staff in order to ultimately enhance the value of the Company. Stock options have been issued on March 28, 2006, March 28, 2008 and September 3, 2014. When determining the number of share warrants granted to individuals, the person's work performance is considered along with the decision of the board of directors.

[Matters Related to Director Remuneration]

Disclosure of Individual Board Directors'

Individual's remuneration is not disclosed.

Remuneration

Supplementary Explanation

Since there is no individual with a total remuneration of over 100 million yen, the total amounts are disclosed.

	Policy on Determining Remuneration Amounts and		Yes
	Calculation Methods

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods

It was decided in a resolution regarding employee remuneration in a stockholders general meeting that a limit shall be enforced on the remuneration of board directors and audit & supervisory board members. The remunerations of individual board directors are decided by resolution at board of directors meetings, and the remunerations of individual audit & supervisory board members are decided at audit & supervisory board meetings. In addition, when considering remuneration for inventions by staff created during work duties, in accordance to intellectual property rights management rules, the result will be based on the conclusion of an investigation by invention investigative commission and a resolution conducted at a board of directors meeting.

[Supporting System for Outside Board Directors and/or Audit & Supervisory Board Members]

Support of outside board directors and outside audit & supervisory board members is handled by the Corporate Management Division. In concrete terms, activities such as providing advance explanations of agenda items of a board of directors meetings will be carried out. In addition, information can be provided by other means such as email or phone as necessary.

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT

OPTiM Corporation

1. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration Decisions (Overview of Current Corporate Governance System) [Updated]
2. • 
     The Company has established the audit & supervisory board to comprehensively consider the characteristics in the scope and projects of the Company, in order to have a corporate governance system with the greatest possible efficiency yet be flexible, which the Company considers to be of the utmost importance. Acknowledging these ideals, the Company's system including the board of directors and the audit & supervisory board has the practical use guidelines as follows.
     ・The Company's board of directors is comprised of five board directors, one who is an outside board director. They all conform to the rules and regulations of the board of directors, and, in addition to monthly regular meetings, hold extraordinary shareholder meetings as necessary. In addition, they enforce the rules of business affairs along with mutually enforcing each other's professional duties. In the board of directors meeting, the three audit & supervisory board members (all three of which are outside audit & supervisory board members) attend, and they declare their opinions as necessary.
     ・The Company's audit & supervisory board consists of the one full-time audit & supervisory board member, and two part-time audit & supervisory board members, and three outside auditors. As each audit & supervisory board member attends the board of directors meetings, and, as necessary, attend regular meetings regarding company projects and observe board directors performing their professional duties. As a general rule, an audit & supervisory board meeting is held every month, and opinions are exchanged on the state of business operations. In addition, discussion and resolutions regarding auditing processes, auditing plans and other important auditing matters are discussed.
   • The one outside board director and the three outside audit & supervisory board members have a limited responsibility contract as decreed by the Articles of Incorporation.
     ・The Company has not created a room dedicated to independent audits, however, the two leaders of the internal audit work independently and they report the results of the audits to the president. The president receives the audit results, notifies the results and improvement recommendations to the department to be audited, and they shall submit the improvement status report to the internal auditors.
     ・The Company's CPAs are Masako Watanabe and Norihiko Asai (both of which have a contract for less than 7 continuous years), and they are limited liability auditors associated with Deloitte Touche Tohmatsu LLC. In addition, two CPAs and three other people assist with the audit. Furthermore, the audit & supervisory board members, internal audit division as well as accounting auditors have regular auditing reporting meetings, where information is exchanged as necessary in order to strengthen mutual cooperation.
     ・In order to deliberate particular management issues of board director's business execution from a practical point of view, a risk management committee was established.
3. Reasons for Adoption of Current Corporate Governance System

The Company has established the audit & supervisory board with outside audit & supervisory board members that possess an abundance of management skills and technical knowledge. The Company recognizes that this has led to the current system providing auditing and supervision with impartiality and transparency.

Furthermore, an outside board director was elected in order to strengthen auditing business executions.

Ⅲ． Implementation of Measures for Shareholders and Other Stakeholders

1. Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights [Updated]

None to report.

2. IR Activities

					Explanation by the
			Supplementary Explanation		representative
					himself/herself
	Preparation and		The Company has rules on dialog with shareholders in Article 6 of
	Publication of		the Basic Policies on Corporate Governance, although it is not
	Disclosure Policy		made in a form of disclosure policy.

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT	OPTiM Corporation
		Regular Investor	Explanatory meetings for analysts and institutional investors are		Yes
		Briefings for	held at fixed intervals, after second quarter financial results and
		Analysts and	yearly financial results are released.
		Institutional Investors
		Posting of IR	The Company has created a website exclusively for IR purposes,
		Materials on Website	and has created a system ensuring the prompt release of
			information for proactive disclosure to both stockholders and
			investment institutions.
		Establishment of	The Corporate Management Division oversees matters related to
		Department and/or	IR.
		Manager in Charge
		of IR

3. Measures to Ensure Respect for Positions of Stakeholders

Supplementary Explanation

	Stipulation of	Consideration of stakeholders' interests is stipulated in Article 3 of the Basic Policies on
	Internal Rules for	Corporate Governance.
	Respecting the
	Position of
	Stakeholders
	Development of	The Company's general IR activity policy is that it, as a listed company, has an
	Policies on	obligation to disclose timely and appropriate information to all kinds of stockholders,
	Information	should fully recognize it as essential matters and understand the position of a partner.
	Provision to	In addition, releasing corporate information in a quick, accurate and fair manner is of
	Stakeholders	the utmost importance.

Ⅳ．Matters Related to the Internal Control System

1. Basic Views on Internal Control System and the Progress of System Development

As the general objective of the Company in creating an internal structure, a "system to guarantee suitable business execution" was established at the board of directors meeting on July 11, 2014, which is a standard internal control system with a basis in current standard objectives. The outline is as follows.

1. System of the rules and Articles of Incorporation that guarantee the enforcement of the board directors' professional duties

To guarantee the enforcement of the board directors' professional duties, the driving force of the directors natural compliance is based on the recognition of the foundation by the management of compliance of rules, Articles of Incorporation and in-company regulation, along with the thoroughness of company ethics.

Board of director meetings, based on rules, Articles of Incorporation, and in-company regulations, along with decision-making about important business management affairs, the supervision of directors' professional duties are enforced.

Audit & supervisory board members, with the authority to decide on rules and in-company regulations, inspect the enforcement of directors' professional duties, based on these rules set by audit & supervisory board members.

1. System to preserve and manage information that affects the enforcement of board directors' professional duties In regards to information that affects the enforcement of board directors' professional duties, in accordance to rules and in-company regulations, pertinent documents or records will be properly preserved or managed.
2. Regulations and other systems regarding management for risk of loss

Regarding management for risk of loss, a company board director or staff member, based on the risk management regulations, proactively try to notice risk before it comes, along with doing the proper assessment of the result, in order to determine the result with the least damage and lowest cost to the Company, risk evasion, reduction, and shifting and other measures are necessary in advance.

4. System guaranteeing the efficient enforcing of directors' professional duties

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORT

OPTiM Corporation

As the system for efficiently enforcing board directors' professional duties, the board directors, based on rules established during board of directors meetings, with fast yet reasonable decision-making, efficient work operations will be conducted.

Furthermore, along with the board of directors making decisions about management foundation objectives and important administrative topics, they work as an organization that supervises the state of enforcing the board directors work duties.

5. System of the rules and Articles of Incorporation that guarantee the enforcement of staff members' work duties In order to guarantee rules and Articles of Incorporation that enforce staff member's work duties, deciding conduct guidelines, maintain the in-company regulations, implement compliance training, and be thorough with keeping the employee rules and ethics.

In addition, confirm performance of legal and appropriate business management, and enforce inspection through the independent internal auditing team.

6. System for the case of an audit & supervisory board member requesting the appointment of a staff member in encouraging to give assistance in performing work duties

In the case of an audit & supervisory board member requesting the appointment of a staff member in encouraging to give assistance in performing work duties, after consulting with the audit & supervisory board member, that staff member to assist the audit & supervisory board member can be appointed.

7. Items relating to the independence from the board director to the staff member in guideline 6

In order to guarantee the independence of the staff member, the staff member shall be defined as the one that has advance consent by the audit & supervisory board meeting and does not follow a board director's commands.

8. Systems relating to processes for reporting to audit & supervisory board members on systems for the reporting by board directors and staff

Board Directors and staff, in addition to matters of violation of rules and Articles of Incorporation, if there are negative affects or a fear of negative affects to the Company, will swiftly report it to an audit & supervisory board member.

In order to understand Important decision-making processes and business affairs enforcement status, audit & supervisory board members should attend board of directors meetings, along with other meetings, as well as checking important documents.

In addition, the audit & supervisory board member will hold hearings with board directors periodically.

9. Other systems for guaranteeing effective performance of auditing by audit & supervisory board members Board Directors and staff members will endeavor to both deeply understand the reasoning behind the audit, and create an environment to allow the audit & supervisory board members to perform their duties effectively.

In addition, in order to have effective audits, the audit & supervisory board members will engage in periodic exchanges of ideas with the president, and also cooperate with the internal auditors.

Furthermore, the audit & supervisory board members will receive explanations about the accounting audit from the Company's accounting auditor, and also conduct information exchange.

2. Basic Views on Eliminating Anti-Social Forces

It is clear that offering illegal profits to antisocial forces and having any relationship with antisocial forces must not be allowed in any form. In addition, in accomplishing societal justice, and to earn the trust of customers, the market, and society, both the Company's board directors and staff should resolvedly remove antisocial forces. This company follows guidelines based on an antisocial forces handling manual in order to remove the influence of antisocial forces. Specifically, the Company uses Nikkei Telecom's investigation service and Google Search to investigate for past issues. There have been no problems found with shareholders, board directors nor customers. In addition, new employees are also checked for relationships with antisocial forces before joining. Furthermore, paid investigations background checks are held for full-time staff.

In the case of customers, the Company's sales division requests the Corporate Management Division to perform a check when business dealings start or when an NDA form is entered.

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[Translation of the Corporate Governance Report filed with the Tokyo StockExchange on June 30, 2020]

CORPORATE GOVERNANCE REPORTOPTiM Corporation

Ⅴ．Other

1. Introduction of Anti-Takeover Policies

Introduction of Anti-Takeover Policies	No

Supplementary Explanation

None to report.

2. Other Matters Concerning to Corporate Governance System

None to report.

This document is a translation of the Japanese language original prepared solely for convenience of reference. In the event of any discrepancy between this translated document and the Japanese language original, the Japanese language original shall prevail.

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